U.S. product recalls hit four-year high in first quarter of 2023

June 9, 2023

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Data from the first quarter of 2023 shows that product recalls across the U.S. automotive, consumer product, food and beverage, medical device, and pharmaceutical industries increased 14.2% from the previous quarter. As reported in Sedgwick brand protection’s latest product recall index report, the 863 product recalls in Q1 2023 marked the highest single-quarter total in four years.

In 2022, records were set for the most defective products recalled in a year with 1.5 billion units. This was the second consecutive year that the 1 billion threshold had been exceeded, and only the third time in the last 11 years. Contrary to that trend, the number of units recalled in Q1 2023 fell 21.6% from the previous quarter and is significantly behind the figure that had been recorded in the opening quarter of 2022. However, with three quarters in the year yet to be reported, and regulatory and consumer scrutiny continuing to intensify, there remains a strong possibility that 2023 will become the third consecutive year of over 1 billion units recalled.

In this latest edition of the index report, we analyze recall data from the first quarter of 2023 and preview the second quarter with data from April. To assist you in understanding and preparing for regulatory changes and evolving product safety risks your industry may encounter in the remainder of 2023, we also provide key insights and analysis from a number of our strategic partners at leading U.S. law firms.

New technology and sustainability a key focus for legislators and automotive regulators

In the first quarter, regulators and legislators focused on expanding electric vehicle (EV) adoption and regulating new technologies like autonomous vehicles (AVs), two areas that will push regulators to move quickly to ensure that vehicles equipped with the latest features are safe for the road. The Environmental Protection Agency (EPA) finalized new emissions standards for heavy-duty trucks, which are more than 80% stronger than current standards. A similar proposal targeting light vehicles is expected this year as the U.S. joins the European Union in moving to adopt new standards for low- to zero-emissions vehicles. Overall, U.S. automotive recalls increased 3.4% from the previous quarter to 245 events. Electrical systems were the leading cause with 48 events, followed by equipment with 46, and airbags with 17.

Consumer product industry faces strict scrutiny from regulators

As cautioned in our previous State of the Nation report, the Consumer Product Safety Commission (CPSC) has continued its more aggressive enforcement strategy and is prioritizing improving consumer awareness of product recalls through unilateral press releases and other activities. The CPSC issued 13 unilateral press releases in FY 2022, more than in the previous four years combined, and is increasingly turning to civil penalties for consumer law violations. Perfluoroalkyl and polyfluoroalkyl substances (PFAS) remain the subject of new regulations at both the federal and state level. The consumer product industry recorded the most recalls in a single quarter since Q3 2015, with 94 events. The number of units recalled also increased significantly, up 442.1% to 23.1 million units.

FDA sets stage for busy year of new regulations and guidance for food and beverage industry

The U.S. Food and Drug Administration (FDA) Foods Program has outlined an ambitious list of topics it expects to publish as a draft or final guidance by the end of 2023, which includes allergens, dietary supplements, food additives, topics related to the Food Safety Modernization Act (FSMA), and labeling. The FDA is also still working to address the impacts of last year’s infant formula shortage with new guidance documents for stakeholders and the proposed restructuring of the Human Foods Program (HFP). The U.S. Department of Agriculture (USDA) is implementing its Strengthening Organic Enforcement (SOE) final rule, which went into effect in March 2023. FDA recalls increased 23.2% from the previous quarter to 117 events, but the number of units impacted decreased 78.7% to 39.3 million. USDA recalls held steady at 11 events for the second consecutive quarter, even as the number of pounds recalled increased 1,129% to 2.9 million.

FDA takes steps to streamline processes for medical device companies

The FDA is testing two pilot programs that implement digital solutions for new product submissions and enhancing stakeholder communications. The agency also expanded its guidance around “Circumstances that Constitute Delaying, Denying, Limiting, or Refusing a Drug or Device Inspection” to make it clear that these rules apply to medical devices as well as pharmaceuticals. Even as the FDA works to streamline processes, medical device companies will soon face new requirements related to cybersecurity that were introduced under the Consolidated Appropriations Act. The first quarter of 2023 saw U.S. medical device recalls increase 4.6% to 252 events, and defective units increase 34.3% to 83.3 million. For the first time in more than seven year, manufacturing defects was the leading cause of recalls with 59.

Pharmaceutical industry faces significant changes

As of May 11, 2023, the federal COVID-19 public health emergency has ended, meaning that companies must decide whether they will seek full authorization for any products marketed under emergency use authorizations (EUAs). There are also considerations around changes in drug distribution, clinical trials, and oversight that were granted during the pandemic. The Modernization of Cosmetics Regulation Act of 2022 (MOCRA), which expands the FDA’s rulemaking and enforcement authority over cosmetics, will put new burdens on cosmetics companies, such as the need to adhere to Good Manufacturing Practices (GMPs), additional labeling, and adverse event reporting, among others. Q1 2023 experienced the most pharmaceutical recalls in a single quarter in the past 18 years, with 144 events. The number of units impacted increased 1,071.8% to 49.5 million after an unusually low number of units were recalled in Q4 2022.

Looking ahead

Strict regulatory scrutiny will continue to be a major risk for manufacturers and their supply chain partners, as evidenced by the increasing number of recall events this quarter. Going forward, regulators will continue to prioritize product safety while introducing rules and regulations that attempt to balance innovation with oversight. And with consumers paying closer attention to recalls and regulators seeking greater transparency and communication, recall and crisis plans will remain a critical element of a company’s risk management protocols.

The U.S. recall index is published every quarter by Sedgwick’s brand protection experts. It is the only report that aggregates and tracks recall data across the U.S. to help industry stakeholders navigate the regulatory environment, product recalls, and other in-market challenges.

Learn more > To download the latest recall index report, click here.

Tags: brand management, Brand protection, brand protection and recall, brand recall, consumer recall, Preserving brands, product management, Product recall, product recall index, recall, United States